sheer tools
Negotiation

Lesson 2 of 8 · 8 min

Do the homework

Most negotiations are decided in preparation, and most people prepare by rehearsing what they will say. That is the least useful kind of preparation. What matters is knowing the landscape well enough to be flexible inside it.

Four things to establish first

  • The range: what this actually goes for, from at least three sources.
  • Their constraints: budget cycle, approval chain, deadline, and who else they are talking to.
  • Their interests: what they need this to achieve, which is rarely just the price.
  • Your walk-away: the specific terms below which no deal beats a bad deal.

The distinction between positions and interests is the one worth internalizing. A position is "we need it for $8,000." The interest behind it might be a fixed annual budget, a boss who approved a number, or a fear of being blamed if it goes wrong. You cannot move a position, but you can often serve the interest another way.

Ask before you propose

Two questions do most of the work: "What has to be true for this to be an easy yes?" and "What happens if you do nothing?" The first surfaces their constraints. The second tells you how much the problem actually costs them, which is the ceiling on what they will pay.

Try it

Before your next negotiation, write one page: the market range with sources, their likely constraints, their underlying interest, and your walk-away number. If you cannot fill the first line, you are not ready to talk price.